Bubs Australia [ASX:BUB] Shares Rise on US Infant Formula Update
Bubs Australia [ASX:BUB] shares rose on Thursday after further updating the market regarding its emergency formula imports to the US.
Earlier this week, Bubs clinched a deal to supply the US with tins of baby formula as the country continues to suffer from an infant formula shortage.
The shortage was exacerbated when the US’s largest formula supplier, Abbott, had to recall formula over contamination concerns.
BUB shares rose as high as 13% in early morning trade, before pulling back somewhat.
At time of writing, the BUB stock was up 7%, trading at 63 cents a share.
Bubs is up 38% in the last week:
Bubs secures fourth formula package deal
The US has enlisted the help of Bubs as the country continues to suffer an infant formula shortage.
Bubs today announced that the Biden Administration has sourced the first two flights to transport the delivery of six Bubs infant formula products.
Emphasising the gravity of the crisis, BUB reported that the situation is dire enough that the US president himself has launched ‘Operation Fly Formula’ to speed up the import of infant formula.
Under Operation Fly Formula, the USDA and the Department of Health and Human Services (HHS) are ‘authorised to use Department of Defense contracted commercial aircrafts to deliver those infant formulas that meet U.S. health and safety standards’.
Instead of airlifting commandos to warzones, the US is commandeering its Department of Defense aircrafts to airlift tins of baby milk.
Bubs said the first shipments are expected to leave Australia on 9 and 11 June, where they’ll be transported as quickly as possible to large American retailers.
Further shipments are still to be scheduled.
Working with the FDA and US government, Bubs is to provide a total of 1.25 million tins (equating to 27.5 million bottles) of baby formula varieties.
Bubs says Australian supplies won’t be affected.
BUB share price — what happens next?
Bubs CEO Kristy Carr said:
‘We would like to express our deepest gratitude to the Biden Administration for extending Operation Fly Formula to enable Bubs to assist American families as quickly as possible.
‘Our team members are working around the clock in conjunction with the White House to resolve logistical challenges so that we can have Bubs® Infant Formula products on shelf in major American retailers as quickly as possible.’
Following a roundtable discussion between Bubs, Biden, and administration officials, in which Bubs was the only manufacturer from the Asia Pacific Region in attendance, Carr added:
‘It was an insightful roundtable convened by the President, and the participants shared many important learnings and experiences. It was pleasing to hear that FDA regards safety as the highest priority, and Bubs satisfies those gold standards. We are thankful that the US Government continues to offer support and work with us.
‘Australia and the United States have enjoyed a long-term friendship. We are proud to be representing our country in providing a first response to assist American families.’
Earlier this week, US President Biden thanked Bubs, saying ‘I thank the guys from Down Under’.
Now, while Bubs has enjoyed a sharp spike on the back of the emergency US order, many other stocks on the ASX aren’t faring as well.
Increasing interest rates, persistent supply chain snarls, and recession fears have soured investor sentiment.
But, as we can see with Bubs, opportunities are out there.
But where do you look, where do you find them?
Well, our small-cap expert Callum Newman has a strategy for picking-out those ‘left-for-dead’ stocks that are most likely to bounce back.
You can find out how he does it, ‘grave-dancer’ style, here.
For Money Morning